Employment Agreement between Delta Financial Corporation and Richard Blass (CFO/EVP)

Summary

Delta Financial Corporation and Richard Blass have entered into a five-year employment agreement, appointing Mr. Blass as Chief Financial Officer and Executive Vice President. Mr. Blass will devote full time to the company and is not required to relocate outside Nassau or Suffolk counties, NY. The agreement outlines salary, severance, and benefits, including conditions for termination with or without cause, and defines circumstances under which Mr. Blass may resign for "Good Reason." Severance and benefits are specified for both non-renewal and early termination, with certain conditions and timeframes for payments and benefits.

EX-10.4 2 c36813_ex10-4.htm

EXHIBIT 10.4
 
EMPLOYMENT AGREEMENT
 
  AGREEMENT made as of the 24th day of March, 2005, by and between DELTA FINANCIAL CORPORATION, a Delaware corporation (the “Corporation”), and Richard Blass (the “Executive”).  
 
W I T N E S S E T H:
 
  In consideration of the representations, warranties and conditions contained herein, the parties hereto agree as follows:
 
1.  Position and Responsibilities.
 
1.1  The Executive shall serve in an executive capacity as Chief Financial Officer and Executive Vice President of the Corporation. The Executive shall perform such functions and undertake such responsibilities as are customarily associated with such capacity. The Executive shall hold such directorships and executive officerships in the Corporation and any subsidiary to which, from time to time, he may be elected or appointed during the term of this Agreement.
 
1.2  The Executive shall devote his full time and best efforts to the business and affairs of the Corporation and to the promotion of its interests.
 
1.3  The principal executive offices of the Corporation shall be maintained in either Nassau or Suffolk counties, New York and the Executive shall not be required to relocate outside of Nassau or Suffolk counties, New York without his consent.
 
2.  Terms of Employment .
 
2.1  The term of employment shall be five years, commencing with the date hereof, unless sooner terminated as provided in this Agreement. The initial term of employment and any extension thereof is herein referred to as the “Term.”
 
2.2  Notwithstanding the provisions of Section 2.1 hereof, the Corporation shall have the right, on written notice to the Executive, to terminate the Executive’s employment for Reasonable Cause, such termination to be effective as of the date on which notice is given or as of such later date otherwise specified in the notice.
 
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2.3  For purposes of this Agreement, the term “Reasonable Cause” shall mean any of the following actions by the Executive: (a) failure to comply with any of the material terms of this Agreement, which shall not be cured within 30 days after the Executive’s receipt of written notice from the Board of Directors; (b) engagement in gross misconduct injurious to the Corporation or an affiliate of the Corporation, which shall not be cured within 30 days after the Executive’s receipt of written notice from the Board of Directors; (c) knowing and willful neglect or refusal to attend to the material duties reasonably assigned to him by the Board of Directors, which shall not be cured within 30 days after the Executive’s receipt of written notice from the Board of Directors; (d) intentional misappropriation of property of the Corporation or an affiliate of the Corporation to the Executive’s own use; (e) the commission by the Executive of an act of embezzlement; (f) Executive’s conviction for a felony or if criminal penalties are imposed on Executive relating to any individual income taxes due and owing by Executive; or (g) Executive’s engaging in any activity which would constitute a material conflict of interest with the Corporation which shall not be cured within 30 days after the Executive’s receipt of written notice from the Board of Directors. If the provisions contained in subsections (a), (b), (c) or (g) above cannot be cured within 30 days due to the nature of the breach, the cure period shall then be extended for a reasonable period of time; provided, however, the Executive undertakes and continues in good faith to cure the same.
 
2.4  No later than six months prior to the end of the Term, the Corporation and the Executive shall meet to discuss the terms and conditions of an extension of the Term. If the Term of this Agreement shall not be extended, at the end of the Term the Corporation shall pay as severance pay to the Executive (1) his annual salary at the rate in effect as of the termination, plus (2) an amount equal to the average of his annual bonuses over the last five years. All such payments shall be made within fifteen days of such termination. In addition, for a period of one year following such termination, the Corporation shall provide the Executive all benefits (including medical coverage) which may be in effect at such time which are generally available to other senior executives of the Corporation or its subsidiaries. Health benefits otherwise receivable by the Executive pursuant to this Section 2.4 shall be reduced to the extent comparable benefits are actually available to the Executive during such period from a subsequent Employer.
 
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2.5  If the Executive’s employment with the Corporation shall be terminated prior to the expiration of the Term (a) by the Corporation other than pursuant to Sections 2.2, 4.1 or 4.2 hereof or (b) by the Executive for Good Reason (as defined herein), then the Corporation shall pay to the Executive as severance an amount equal to the product of (1) the lesser of (A) the remaining Term in years plus 1, multiplied by 100% or (B) 299%, multiplied by (2) the last five years’average annual compensation as calculated in accordance with Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”). All such payments shall be made within fifteen days of such termination. In addition, for the balance of the Term following such termination (or for a period of one year following such termination, if greater), the Corporation shall provide the Executive all benefits (including medical coverage) which may be in effect at such time which are generally available to other senior executives of the Corporation or its subsidiaries; provided, however that the Executive shall only be entitled to such payments and benefits as long as he is in compliance with the provisions of Section 5 below, to the extent applicable. Health benefits otherwise receivable by the Executive pursuant to this Section 2.5 shall be reduced to the extent comparable benefits are actually available to the Executive during such period from a subsequent Employer. The Executive shall have the right for a period of 30 days after he becomes aware of a Good Reason event to terminate this Agreement for Good Reason.
 
2.6  For purposes of this Section, “Good Reason” shall mean any of the following, which occurs subsequent to the date of this Agreement:
 
(i)  any material change is made to the Executive’s duties, responsibilities, authority, reporting requirements or title to a level materially below, or that are otherwise inconsistent with, those normally associated with the position held by the Executive on the date hereof;
 
(ii)  a reduction by the Corporation of the Executive’s base salary as then in effect, without the Executive’s written consent; 
 
(iii)  a relocation or an actual change in the Executive’s place of employment or the Corporation’s principal executive offices outside of Nassau or Suffolk counties, New York, without Executive’s prior consent;
 
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(iv)  prior to a Change in Control, failure of the Corporation to continue to maintain the same medical or other benefit plans covering the Executive as are made available to other senior executives of the Corporation;  
 
(v)  any material breach by the Corporation of any provision of this Agreement which shall not be cured to the reasonable satisfaction of the Executive within 30 days after the Board of Directors’receipt of written notice from the Executive;
 
(vi)  any failure by the Corporation to obtain the written assumption of this Agreement by any successor entity.
 
3.  Compensation .
 
3.1   (a)     The Corporation shall pay or cause Delta Funding Corporation to pay to the Executive for the services to be rendered by the Executive hereunder a salary at the rate of $350,000 per annum. The salary shall be payable in equal installments in accordance with the Corporation’s normal payroll practices. Such salary will be reviewed at least annually and shall be increased (but not decreased) by the Board of Directors of the Corporation in such amount as determined in its sole discretion.
 
(b)  In addition, at the discretion of the Compensation Committee of the Board of Directors (the “Compensation Committee”), after consideration of the Corporation’s actual performance relative to its financial and operational objectives for any particular period, and the performance of the Executive, as well as such other factors deemed appropriate by the Compensation Committee in its discretion, the Corporation may also pay the Executive an annual bonus with respect to each fiscal year of the Corporation. Such Bonus, if any, may be paid in cash, in shares of Delta Financial Corporation’s Common Stock, par value $.01 per share (the “Common Stock”) or in any combination of cash and shares of Common Stock, as determined in the discretion of the Compensation Committee. Nothing herein contained shall, however, obligate the Corporation to pay any annual bonus to the Executive, it being understood that any such bonus shall be in the sole discretion of the Compensation Committee and that the amount thereof, if any, may vary depending upon actual performance of the Corporation and the Executive as determined in the discretion of the Board.
 
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(c)  In addition to the Bonus described in Section 3.1(b), the Corporation may pay the Executive at the Board of Directors’discretion additional cash bonuses. Nothing set forth in this Section 3.1(c) shall, however, obligate the Corporation to pay any bonus described in this Section 3.1(c) to the Executive, it being understood that any such bonus shall be in the sole discretion of the Board of Directors and that the amount thereof, if any, may vary depending upon actual performance of the Corporation and the Executive as determined in the discretion of the Board.
 
(d)  On the date of this Agreement, the Executive shall be granted non-qualified stock options pursuant to Delta Financial Corporation’s 1996 Stock Option Plan (the “1996 Option Plan”) to purchase 100,000 shares of Common Stock, at a price per share equal to the per share closing price of the Common Stock on the date hereof. The foregoing options shall vest 1/3 on the grant date, and 1/3 on each succeeding anniversary of the grant date, and have a term of seven years.  
 
(e) Also on the date of this Agreement, all of the Executive’s existing unvested stock options shall immediately become exercisable.
 
3.2  The Executive shall be entitled to participate in, and receive benefits from, any insurance, medical, disability, bonus, incentive compensation (including additional grants of non- qualified stock options under any of Delta’s stock option plans, as determined by the Corporation) or other employee benefit plan, if any are adopted, of the Corporation or any subsidiary which may be in effect at any time during the course of his employment by the Corporation and which shall be generally available to the Executive on terms no less favorable than to other senior executives of the Corporation or its subsidiaries. The Corporation agrees to reimburse Executive for all medical costs and expenses incurred by him which are not covered by the Corporation’s group medical plans, up to an aggregate maximum amount of $100,000 per annum, upon submission of appropriate and itemized documentation.  
 
3.3  The Corporation agrees to pay the Executive a car allowance of $1,000 per month.
 
3.4  The Corporation agrees to reimburse the Executive for all reasonable and necessary business expenses incurred by him on behalf of the Corporation in the course of his duties hereunder upon the presentation by the Executive of appropriate vouchers therefor.
 
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3.5  The Executive will be entitled each year of this Agreement to a paid vacation of five weeks, no more than half of which can be carried forward to future years.
 
3.6  Upon termination of this Agreement for Reasonable Cause or due to death or incapacity of the Executive (as defined in Section 4.1), the Executive (or his estate) shall be entitled to all unpaid compensation (including pro-rata Bonus) and benefits accrued to the date of termination.
 
3.7  The Executive shall not be required to mitigate damages or the amount of any payment provided to him under this Agreement by seeking other employment or otherwise.
 
3.8  If the Executive’s employment with the Corporation shall be terminated by the Corporation due to death or incapacity of the Executive (as defined in Section 4.1), then, effective upon the date of termination, all stock options and restricted stock held by the Executive beneficially (in trust or otherwise) and/or of record, including, without limitation, all stock options and restricted stock held in trust for the benefit of the Executive in any stock option plan or similar plan as may be established at the Corporation’s discretion, shall vest and become immediately exercisable (and in the case of stock options, shall remain exercisable by the Executive or his estate for one year following such termination). 
 
4.  Incapacity; Death .
 
4.1  If, during the period of employment hereunder, because of illness or other incapacity, the Executive shall fail for a period of 120 consecutive days, or for shorter periods aggregating more than 120 days during any twelve month period, to render the services contemplated hereunder, then the Corporation, at its option, may terminate the term of employment hereunder, upon not less than 30 days written notice from the Corporation to the Executive, effective on the 30th day after giving of such notice; provided, however, that no such termination will be effective if prior to the 30th day after giving such notice, the Executive’s illness or incapacity shall have terminated and he shall be physically and mentally able to perform the services required hereunder.
 
4.2  In the event of the death of the Executive during the term hereof, the employment hereunder shall terminate on the date of death of the Executive.
 
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